HAMDAN v NRMA INSURANCE LTD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, MEAGHER and STEIN JJA 6 June 1997, 27 August 1997 [1997] NSWCA 135 INSURANCE — FRAUD — CIRCUMSTANTIAL CASE — APPEAL AGAINST FINDING OF FRAUD — APPLICATION TO ADMIT FRESH EVIDENCE INSURANCE — FRAUD — CIRCUMSTANTIAL CASE — APPEAL AGAINST FINDING OF FRAUD — APPLICATION TO ADMIT FRESH EVIDENCE — On appeal the appellants submitted: (1) the court should receive fresh evidence on appeal; and, (2) the trial judge was not justified in making the finding which she did against the plaintiff, even on the civil standard of proof. Held: (1) the plaintiff's application to use fresh evidence should be refused as that evidence had been available to the plaintiff at the trial, and in any event was of insufficient weight to justify its use on appeal; and, (2) on the evidence, and on the way the case was conducted before her, the method of reasoning adopted by the trial judge was appropriate and led logically to her conclusion. Cases: Briginshaw v Briginshaw (1938) 60 CLR 336. Priestley JA This is an appeal which at first sight looked as if it might have some prospect of success. The appellant had a Mercedes car in which on 23 March 1991 he drove himself and his wife to go to a wedding at Stanmore. When they came back from the wedding to where they had parked the car it was missing. The car was insured with NRMA Insurance Ltd (NRMA). It was found by police at Botany on 24 March 1991, badly damaged, by far the greater part of the damage being to the exterior of the car. Mr Hamdan made a claim against the NRMA which the NRMA refused to pay. On 3 March 1992 Mr Hamdan commenced proceedings claiming to be entitled to indemnity under the insurance policy. The reason why I thought at first glance that the appeal might have some chance of success was that the NRMA's resistance to the plaintiff's claim was principally on the ground of fraud, which the NRMA bore the onus of proving and the proof relied entirely on circumstantial evidence which seemed to be rather slender. Allied with this, so far as prospects of appeal were concerned, was the fact that the trial judge in reasons which were almost throughout meticulous, at their end leapt to a series of findings for which she gave very little explanation. However, as argument in the appeal went forward it became increasingly apparent that there was considerable force in the circumstantial evidence and that there could be discerned from the trial judge's reasons, even although with some difficulty, a coherent chain of thought which justified her conclusion. The principal element in the circumstantial proof of fraud was that whoever drove away the Mercedes to its partial destruction on the night of 23 March 1991 must have had an ignition key for the car. There was technical evidence before the trial judge which justified this conclusion. There was also evidence from which the trial judge was entitled to conclude, and did conclude that it was highly 2 UNREPORTED JUDGMENTS likely that the only person in possession of a key or keys which could turn the Mercedes ignition was the plaintiff. There was also evidence which the trial judge was entitled to accept that the plaintiff was in urgent need of money and in the last quarter of 1990 had made determined but unsuccessful efforts to sell the Mercedes. When these failed he obtained, in December 1990, comprehensive insurance of the car in lieu of the previous policy which was for third party liability only. The Mercedes was garaged for virtually the whole of the period leading up to its being damaged. On 23 March 1991 Mr Hamdan was contracted to go to Saudi Arabia for two years employment there, although some time later his application for a visa, lodged on 23 April 1991, was refused and he remained in Australia. The point was however, that on the date of the damage the plaintiff was contracted to leave Australia shortly, he needed money badly, and the Mercedes was the only asset of any consequence of either himself or his wife. He agreed in cross-examination that he originally had two keys to the car but had only been able to produce one to the NRMA investigator. A further feature of the evidence was that although Mr Hamdan denied any fraud or participation in the damaging of the car, his evidence to this effect was not accepted by the trial judge. She listed in her reasons a number of matters going to the plaintiff's credit generally which led her to find him an unreliable witness. Once again, on the evidence as I have read it, her view concerning the plaintiffs credit was one she was entitled to form, and there was no reason obliging her to accept the plaintiff's denials of the allegations made by NRMA. The fact that she did not believe him did not of course entitle her to infer from that disbelief that he had taken part in any fraud. However, it meant that from his side of the record there was no positive evidence tending to negate the alleged fraud, so that the case fell to be considered by reference to the question whether the circumstantial case relied on by the NRMA had sufficient probative force to justify her in concluding that it had been made out. This she did. The first submission in the oral argument in the appeal was based on the fact that the evidence on which the judge relied for the conclusion that the car could only have been moved from where it had been left by the plaintiff by being driven by means of a key was given by the last witness called by the NRMA in its defence, Mr Bird. It was submitted that this evidence had taken the plaintiff by surprise. It may well have done. The NRMA's fraud case had been pleaded in very general terms and it seems that no particulars of it had been obtained by the plaintiff before going to trial. Assuming in the plaintiff's favour that there had been an element of surprise in the evidence given by Mr Bird, that in itself could not be, in the circumstances of the way the trial was going, a ground of appeal. There was plenty of opportunity for the plaintiff to have sought an adjournment, even if no other protest concerning the evidence were made or available. Mr Bird's evidence was given on 28 February 1995 and 1 March, a Tuesday and a Wednesday. Counsel addressed the trial judge on Thursday, 2 March 1995. She then reserved her decision indicating she might give judgment on 14 March. In the event judgment was delivered on 17 March 1995. No application for adjournment or to call evidence in reply or to seek leave to reopen the case for the plaintiff was made. Counsel for the plaintiff appellant recognised that the foregoing circumstances meant that the plaintiff's submission concerning surprise was of itself of no help in seeking a new trial. However, he sought to use the circumstance of the claimed surprise (he was not the counsel who appeared at the trial) as support for an application that the court should receive for the purposes of the appeal evidence URJ HAMDAN v NRMA INSURANCE LTD (Priestley JA) 3 which had not been put before the trial judge. The point of Mr Bird's evidence had been that his physical inspection of the car, its steering and the way the steering lock was working at the time of his inspection showed that the steering lock had not been interfered with at the time the car was moved. It followed from this, according to his evidence, that an ignition key must have been used to get the car moving. The evidence which the plaintiff asked the court to receive in the appeal was in the form of a written quotation that had been obtained for the repair of the car some time after its recovery. One item in the quotation arguably supported the view that some repair to the ignition lock was necessary. The man who prepared the quotation had sworn an affidavit in which he said he had no recollection of his inspection of the car but would not have put that item in the quotation if there had not been some damage to the ignition. The quotation had been in the plaintiff's possession and in the possession of his solicitors long before the trial. In the course of the pre-trial preparations a copy of it had in fact been supplied to the legal representatives of the NRMA. The Court formed the view that two factors combined to make it necessary to refuse the plaintiffs application to use this evidence in the appeal. One was that it was available at the trial and there was no reason why efforts should not have been made then to have it admitted in the plaintiffs case if it were thought to be admissible and helpful, the second was that it did not appear in any event to be of sufficient weight to be of the kind of assistance to the plaintiffs case that would be necessary to justify its use in the appeal. The next submission for the plaintiff appellant was that the trial judge had recognised a number of possible explanations for the taking of the car only one of which involved the participation of the plaintiff appellant by means of a key. The submission was that in view of the gravity of the finding of fraud against the plaintiff the trial judge had not been justified in making the finding which she did against him, even on the civil standard of proof, bearing in mind what the High Court had said about such cases in Briginshaw v Briginshaw (1938) 60 CLR 336. However, when the evidentiary position concerning the other possible methods of removing the car was looked at, it appeared either that the evidence in the case negatived them or, in the case of those not actually negatived, made them seem so unlikely that it would be unreasonable, even on the Briginshaw v Briginshaw approach, to regard any method of removal of the car other than the one found by her Honour, as having any real likelihood. The methods discussed by her Honour, in response to the submissions of the parties, by which the car might possibly have been taken were (a) by a key supplied for the Mercedes, (b) by (i) drilling a hole in the dashboard and removing the barrel of the ignition lock with a sliding hammer, and (ii) disengaging the steering lock and removing a clamp connecting the ignition and steering mechanisms, (c) by using another or duplicate key or a special lock picking device and (d) by using considerable force to break the steering lock and hot wiring the vehicle by gaining access under the vehicle and under the bonnet of the vehicle. Mr Bird's evidence, once accepted by her Honour, eliminated (b) and (d). Other evidence showed that another or duplicate key was, in the case of Mercedes such as this car highly unlikely to have been available; even if it were, it would be a virtually unbelievable coincidence that a person in possession of such a key would have known where the plaintiffs car was at the time it was taken, without some collusion with the plaintiff; and the idea of a special lock picking device was effectually negatived by evidence from a locksmith, Mr 4 UNREPORTED JUDGMENTS Plummer, who gave very detailed evidence of the very great difficulty there would be in constructing a pick lock for this particular car. Counsel for the plaintiff appellant carefully examined the evidence concerning these various possibilities, submitting that aspects of it were unsatisfactory. He also submitted that there were other possibilities outside what had been put to the trial judge, for example the car being towed away, which this court should take into account in assessing the probabilities of the matter. Despite his earnest efforts, I do not think he showed that there was anything seriously wrong with any of the evidence upon which the trial judge relied, as above indicated. Once the judge had considered and rejected the various innocent possibilities advanced on behalf of the plaintiff before her, the only remaining explanation was one involving the plaintiff as participating in the provision of a key to whoever it was that drove the car away. In my opinion, on the evidence before the trial judge and on the way the case was conducted before her, the method of reasoning she adopted was appropriate and led logically to her conclusion. The plaintiff appellant has not been able in the appeal to point to any material requiring the judge to make any findings other than those that she did make and has not been able to show either, if this be relevant, that if the case had been conducted In these circumstances it is my opinion that the appeal should be dismissed with costs. Meagher JA I agree with Priestley JA. Stein JA I agree with Priestley JA. The appeal is dismissed with costs. Counsel for the Appellant: G T W Miller QC/P B Ambagiotti Solicitors for the Appellant: Trevor Nyman & Co Counsel for the Respondent: J G Duncan Solicitors for the Respondent: Abbott Tout